DuPont Decomposition
Why does FLAIR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.8% = 11.2% × 0.88 × 1.20
Latest: FY2025
Profitability
Net Margin
11.2%
9.7% →11.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.88x
1.02x →0.88x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.20x
1.76x →1.20x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.6 pp over 4 years. Driven by net margin improving (9.7% → 11.2%), asset turnover declining (1.02x → 0.88x), leverage falling (1.76x → 1.20x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.7% | 1.02 | 1.76 | 17.4% |
| FY2023 | ₹0Cr | ₹0Cr | 12.6% | 1.36 | 1.57 | 26.9% |
| FY2024 | ₹0Cr | ₹0Cr | 12.1% | 0.88 | 1.23 | 13.2% |
| FY2025 | ₹0Cr | ₹0Cr | 11.2% | 0.88 | 1.20 | 11.8% |
How to read DuPont
- • Rising ROE from margin = pricing power, operational improvement (good)
- • Rising ROE from turnover = better asset utilization (good)
- • Rising ROE from leverage = more debt, amplified risk (caution)
- • Falling ROE across all three = structural deterioration (red flag)
DuPont decomposition from audited annual financials. Factual analysis, not investment advice.